Canadian wineries say scrapping provincial trade barriers would add billions to GDP

HALIFAX – Canada’s wine sector is worth more than $10 billion a year and the industry says a few tweaks — like scrapping domestic trade barriers — could add billions of dollars more to the national economy.

A new report from Deloitte, commissioned by the Wine Growers of Canada, says the key is getting Canadians to buy at least 51 per cent of their wine from homegrown producers over the next 15 years. That would increase the value of the wine sector from the current $10.1 billion to $13.7 billion, including from spinoff industries like shipping and tourism. The sector has plateaued at about 40 per cent domestic market penetration for almost two decades.

“We’re not going to be reaching 51 per cent by increasing wine sales across Canada. We’re going to be increasing to 51 per cent by displacing imports over time,” Dan Paszkowski, president of the Wine Growers of Canada, said in an interview.

The report says homegrown products make up more than half of sales in each of the leading wine countries in the world, including France where consumers opt for a domestic bottle 83 per cent of the time.

One important change the Canadian industry wants to see is consumers buying wine directly from out-of-province wineries for their own personal use. Paszkowski says retail stores can’t stock every product, and they typically want large volumes of wine, which doesn’t work for small- and mid-size operators.

“We’re probably the only retail sector in the country that has to say no to a consumer when they come and visit our winery and say, ‘Can you ship this to my home province?’” Paszkowski said. “We can’t legally do it yet. And that really is hurtful to the growth of the industry because we have four million tourists come and visit our wineries every year.”

In the U.S., the report says direct-to-consumer shipping is allowed in 48 states, giving producers a near-national market that helped grow the value of the California wine sector to about US$67.5 billion in 2024.

Carl Sparkes, owner of Nova Scotia’s Devonian Coast Wineries, which produces more than 150,000 cases a year, says he once shipped a case of his Jost Vineyards’ Big Friggin’ Red to every premier. The wine, created for Canada’s 150th birthday in 2017, came with a letter reminding them that the Constitution includes a clause allowing for the free movement of agricultural products across provincial boundaries.

“As a principle, any Canadian should be able to order directly,” Sparkes said in an interview. “I think they order so much on Amazon today from around the world, yet they can’t order a bottle of wine, an agricultural product, from next door. It’s just wrong.”

The federal government has largely removed its restrictions on alcohol trade between provinces, but provincial constraints still exist. The report says just three provinces — British Columbia, Manitoba and Nova Scotia — allow unfettered direct-to-consumer wine shipments from other jurisdictions.

Others have one-off deals or have started the process of loosening restrictions since the U.S. launched its trade war last year. Alberta has an agreement with B.C. that allows direct-to-consumer sales on both sides of the boundary, says the report, while Ontario signed a memorandum of understanding on the practice with Nova Scotia this spring. New Brunswick and P.E.I have both introduced legislation that is still pending. Saskatchewan allows direct out-of-province sales but requires a permit.

Last year, 10 provinces and territories signed a memorandum of understanding committing to explore a direct-to-consumer system. Paszkowski says he expects an announcement soon on creating a fully-integrated market that will tackle the harmonization of matters such as shipping, compliance and tax collection.

While every province produces some wine, the report says the Canadian industry is dominated by four regional clusters: the Okanagan Valley in British Columbia, the Niagara region in Ontario, Quebec’s Eastern Townships and the Annapolis Valley in Nova Scotia.

Each bottle of 100 per cent Canadian wine generates about $89.99 for the economy, says the report, compared to $15.73 for each imported bottle. The benefits extend beyond the country’s more than 600 wineries, helping to support the culture, tourism and transportation sectors.

Wine growers also want to tackle what they say is an uncompetitive federal excise tax structure that contributes to foreign wine often being cheaper than a local bottle.

The excise tax for Canadian wine containing more than seven per cent alcohol is 74.5 cents per litre. In the U.S. the excise tax works out to about 39 cents per litre, says the report, while France’s tax is about six cents per litre. Paszkowski says a Canadian winery in the Niagara region can end up paying hundreds of thousands of dollars more in tax than a counterpart across the border

“That winery in the United States has a significant advantage to increase its scale, to decrease its costs, to become much more competitive at a faster rate than the Canadian wine industry is able to do,” said Paszkowski.

In 2022, Ottawa created the $166-million Wine Sector Support Program designed to help the industry adapt and respond to challenges. It was renewed in 2024 with an additional $177 million but is currently in its final year. The sector is pushing for another renewal and says it needs more long-term investment certainty.

“If we’re serious about growing the sector and keeping the investment here at home, we need stable, predictable policy that gives wineries the confidence to invest here,” said Sparkes. “We’re in a long-term business. What we plant today won’t produce for years. And that level of predictability is critical.”

This report by The Canadian Press was first published May 15, 2026.